Exam 23: Checks and Banking in the Digital Age

John writes a check to Kay as payment for a DVD player but soon discovers the player is broken.He goes to the drawee bank and orally authorizes Larry,a bank officer,to stop payment on the check.This order is valid for

Currently,it is not clear which,if any,laws apply to the security of e-money payment information.

The bank on which a check is drawn is the payor bank.

Generally,a cash deposit is not available for withdrawal until the next business day.

A bank is obligated to pay an uncertified check presented less than six months from its date.

Dora writes a check for $100 drawn on Eastern Bank and presents it to Fast Cash,Inc.,for payment.If the check is not backed by sufficient funds,Dora may be prosecuted for

An oral stop payment order is valid for thirty days.

Generally,the funds represented by a deposited local check must be available for withdrawal within one business day.

A customer must examine a bank statement and report any discovered forged signature to recover from the bank for the forgery.

Fact Pattern 23-1 (Questions 15 and 16 apply) Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues a stop-payment order. -Refer to Fact Pattern 23-1.Capital Bank

A bank is subject to a civil suit if its customer writes a bad check.

Kris presents an instrument that states "pay to the order of Liv" to Metro Bank for payment.This is a special type of draft drawn on a bank,ordering the bank to pay a fixed amount of money on demand.This is

Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity Bank.Most likely,if the bank pays the check

Brandy forges Caleb's signature on a check "payable to the order of Brandy" drawn on Caleb's account in Downtown Bank.Caleb's forged signature is

Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment.This instrument is the most common type of negotiable instrument,which is

Jen signs a check "pay to the order of Key" drawn on Jen's account in Little Bank to buy Key's car.Jen asks Little Bank to indicate on the face of the check that it will accept it when Key presents it for payment.If the bank agrees,this will be

The Federal Reserve System acts as a clearinghouse where banks exchange checks.

The death of a customer revokes a bank's authority to pay an item.

Brendan signs a check "pay to the order of City College Bookstore" drawn on his account in Delta Bank to pay for his current semester's textbooks.The bookstore deposits the check in its account in Eagle Bank.Like most checks,this check is

Simon signs a check "pay to the order of Tilly" drawn on Simon's account in United Bank.Vela forges Tilly's indorsement,First Federal Bank cashes the check,and Vela disappears.United pays First Federal and debits Simon's account.Most likely,the ultimate loss will fall on